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Henderson and Bainbridge Podcast on Outsourcing the Board of Directors

Law and Liberty's Symposium on the Crisis in the Catholic Church

From the Law & Liberty blog:

... we have put together a symposium by Paul Seaton, Richard Garnett, and Ed Condon to think about the legal, institutional, and reform issues the Catholic Church’s abuses puts to the law and to itself.

Paul Seaton – The Archbishop and the Pope

To begin with the obvious is a good place to start. In this case it is also quite dramatic. Archbishop Viganò’s recent J’accuse of the Pope and many high-up church men is not just another salvo in the ongoing civil war in the Catholic church, it changes the battlefield in a dramatic way. Its impact was immediately felt, while its full impact and significance remain to be seen, as responses and reactions unfold. Such is the nature of history with human agency involved. Since it is a battlefield with armed camps and live-fire, there will be casualties, including reputations and, to some extent, truth, and smoke aplenty. In the fog of battle, it helps to have some understanding of the state of the Church and who the combatants are.

Richard W. Garnett – The Catholic Church’s Accountability and Autonomy

[T]he recent horrifying and heartbreaking revelations, reports, and rumors of sexual abuse in the Catholic Church have supplied additional evidence that, reasonable people could well conclude, cuts against my positions. As Damon Linker put it, writing in The Week, the “monstrous, grotesque ugliness” of alleged and confirmed abuses reveals the Catholic Church “as a repulsive institution.” Respecting the rights of the “repulsive” is, for all of us, a challenge.

Ed Condon – Flouting the Canon Law, Once More

The recent series of scandals to engulf the Church in the United States, first around Archbishop Theodore McCarrick and then following the publication of the Pennsylvania grand jury report, have left the hierarchy in a difficult position. On the one hand, the evidence seems to be that previous reforms are working, albeit with now obvious gaps in its applicability—most notably for addressing allegations made against bishops. On the other, the presence of so many unresolved cases, even if they are historical, in many dioceses suggests a continued reticence to go “looking for trouble” in one’s own filing cabinet.

Predictably, of course, let me use that as a jumping off point for a little self-promotion:

Bainbridge, Stephen M., Restoring Confidence in the Roman Catholic Church: Corporate Governance Analogies. UCLA School of Law, Public Law Research Paper No. 18-32. Available at SSRN: https://ssrn.com/abstract=3249236

New article: Restoring Confidence in the Roman Catholic Church: Corporate Governance Analogies

Bainbridge, Stephen M., Restoring Confidence in the Roman Catholic Church: Corporate Governance Analogies. UCLA School of Law, Public Law Research Paper No. 18-32. Available at SSRN: https://ssrn.com/abstract=3249236

My essay "Conservative Critiques of Capitalism" in the latest issue of American Affairs Journal https://t.co/n7jk6Jl44O

— Professor Bainbridge (@ProfBainbridge) August 20, 2018

Yours truly is the third most cited corporate law professor for the period 2013-2017; UCLAW as a whole outperformed

Brian Leiter reports:

Based on the latest Sisk data, here are the twenty most-cited corporate law and securities regulation professors in the U.S. for the period 2013-2017 (inclusive) (remember that the data was collected in late May of 2018, and that the pre-2018 database did expand a bit since then).  Numbers are rounded to the nearest five.    Faculty for whom 75% or more of their citations (based on a sample) are in this area are listed; others with less than 75% of their citations in this field are listed in the category of "other highly cited scholars who work partly in this area."

Those in the know will find a certain amusement in the composition of the top three.

In related news:

Cite-specific honors: @UCLA_Law is 11th for scholarly citations in new Sisk study, up 2 from '15 ranking. Most-cited scholars come from many disciplines: @profkang @adamwinkler @ProfBainbridge @sandylocks @VolokhC @russellkorobkin H Motomora, J Salzman, K Raustiala, D Carbado. https://t.co/XqElbpM0yq

— Bill Kisliuk (@bkisliuk) August 15, 2018

We're ahead of excellent schools like Cornell, Michigan, Northwestern, Georgetown, Texas, USC (well, naturally), and my alma mater Virginia!

Now to swallow my pride and give credit where due. Longtime readers will recall that I strongly opposed creating the UC Irvne law school. I still think my arguments made sense at the time. But I must doff my cap to the good folks at Irvine. They are ranked 12th! For such a young law school to have done so well, is amazing and a credit to the faculty and the leadership. Kudos.

 

Bainbridge and Henderson on Limited Liability Gets a Strong Review

German scholar Thilo Kuntz has published a fairly lengthy essay reviewing my book with Todd Henderson, Limited Liability: A Legal and Economic Analysis. See Thilo Kuntz, Asset Partitioning, Limited Liability and Veil Piercing: Review Essay on Bainbridge/Henderson, Limited Liability. 19 European Business Organization Law Review 439-463 (2018), which unfortunately is not open access and is available to non-subscribers as a preview only.

Fortunately, however, a working draft is available on SSRN: Kuntz, Thilo, Asset Partitioning, Limited Liability and Veil Piercing - Review Essay on Bainbridge/Henderson, Limited Liability (March 14, 2017). European Business Organization Law Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2949685

Here's the working draft's abstract:

One of the core features of modern corporate law is the partitioning of the corporation’s assets and the shareholders’ (private) assets affirmatively and defensively in the sense that the claims of a corporation’s creditors are prior to those of shareholders’ personal creditors with respect to corporate assets and that claims of the shareholders’ personal creditors have priority over those of corporate creditors with respect to shareholders’ private assets. The second principle is the rule of limited liability. What makes it special is that it may not be created by contract – or only under severe restrictions. Courts in many jurisdictions curtail the rule of limited liability by doctrines such as “piercing the corporate veil”, exposing shareholders to a creditor’s claim and therefore to personal liability for the corporation’s debts. The circumstances giving cause to such measures are not clear, however. Additionally, in historical perspective, combining business entities with defensive asset partitioning is not a self-evident maneuver; even modern scholars challenge the idea of limiting liability in general, at least vis-à-vis tort creditors. Stephen Bainbridge and M. Todd Henderson thus take up an important and timely topic with their book on limited liability and veil piercing. Considering the many aspects they discuss, their book provides a welcome chance not just to write a short review, but to take up some general issues of asset partitioning and veil piercing. This review essay, accepted for publication in the European Business Organization Law Review, runs the following course: After providing a historical perspective on limited liability in section II., section III. turns to its relationship with incorporation. Section IV. deals with the question why limited liability should be accepted at all, thus preparing the stage for a look at alternative approaches in section V.

And here's the conclusion from the final, as published version:

Bainbridge and Henderson’s book has a lot to offer for readers interested in limited liability and veil piercing. They provide a rich survey of the most important US literature in the field and add to the discussion by bringing new and interesting arguments to the table. Taking into account how long this debate has been going on and the sheer mass of contributions, this is by no means a small feat. Furthermore, that the authors try to provide a comparative view is a welcome and enriching move as it pushes the academic debate to a broader forum, showing the importance and fruitfulness of comparative approaches. Bainbridge and Henderson make a strong case for abolishing veil piercing, offering a whole package of arguments in favor of reform. Their treatment of veil piercing concepts, the work’s prime rib, is a rewarding read.

I am sure Todd will join me in thanking Professor Kuntz for providing such a detailed, thoughtful, and helpful analysis of our work.

Quoted re Dr Mark McClellan

From Kaiser Health News:

McClellan is director of the Margolis Center for Health Policy at Duke University, the academic position by which he’s commonly identified. But he frequently has not disclosed another position he’s held since late 2013: He earned $285,000 last year on the board of pharmaceutical giant Johnson & Johnson, a company accused of blocking the sale of Pfizer’s Inflectra biosimilar, which competes against J&J’s blockbuster Remicade, a rheumatoid arthritis drug. ...

As a board member to these for-profit health care companies, McClellan has a fiduciary obligation “not to injure them” when writing articles and speaking, said Stephen Bainbridge, law professor at UCLA.

And while there is no legal requirement to disclose board memberships when writing for journals or speaking, Bainbridge and other experts agreed there is an ethical obligation.

“There’s certainly a potential conflict of interest there,” Bainbridge said, adding that while serving on the board of Johnson & Johnson “you are dealing with an enormous company that has fingers in a lot of different pies.”

For students of fiduciary law

New Research Handbook on Fiduciary Law https://t.co/uksslmWI1R. Edited by @BYULawSchool Dean @professor_smith & @DePaulLaw's Andrew S. Gold, with chapters by leading experts that shed new light on this rapidly growing field of study. Read free chapters: https://t.co/t7Mdnttz2V pic.twitter.com/hesaGA2Mb4

— Elgar Law (@Elgar_Law) May 21, 2018

FYI: MY essay on The Parable of the Talents is one of the chapters. Amazon link: 

Research Handbook on Fiduciary Law edited by D. Gordon Smith and Andrew S. Gold available for a whopping $290.00 https://t.co/BBdFG2QBA3 But what else are you going to spend your expense account on?

— Professor Bainbridge (@ProfBainbridge) May 21, 2018

My Certificate of Completion of the Course on Catholic Social Thought from University of Notre Dame STEP Program

Jeff Lipshaw and yours truly

Jeff Lipshaw touches on yours truly in passing in an article that is a response to "Pseudo-Contract and Shared Meaning Analysis" by Professors Robin Bradley Kar and Margaret Radin:

Here we have Professors Kar and Radin, whose access to information, education, and intelligence are unimpeachable. One of them (Kar) is a longstanding friend and correspondent. I have nothing but the highest regard for them. But, in this instance, I think of them the way I sometimes do about someone, also a friend, one of the world’s leading corporate law scholars, whose access to information, education, and intelligence is equally unimpeachable. That professor is also a very publicly committed Catholic,58 and I am quite sure has made his own ontological and epistemological commitments no amount of reasoned discourse could ever cause me to accept. Wittgenstein’s (and derivatively Ribeiro’s) assessment was that this kind of disagreement is incapable of reconciliation. Instead, a change in belief of one of the interlocutors requires conversion. “If reconciliation is to occur, then one of us must forsake reason-giving, (non-rationally) reject our old rule, and (non-rationally) accept a new rule, thereby ending the dispute.”

58 Stephen Bainbridge, On Closeted Christian Law Professors: Thoughts on Dreher’s Kingsfield, PROFESSORBAINBRIDGE.COM, http://www.professorbainbridge.com/professor bainbridgecom/2015/04/on-closeted-christian-law-professors-thoughts-on-drehers- kingsfield.html (Apr. 26, 2015).

I'm grateful for the kind words (which IMHO especially includes the part about being a "publicly committed Catholic," which is at the end of the day what matters most). I trust Jeff will not take it  amiss if I reward him by praying for his conversion, since reasoned discourse apparently won't work in his case.

Contract law geeks will definitely want to go read the whole article on its own merits, of course.

Professor Stephen Bainbridge's Catholic Social Thought Bibliography

Must Salmon Love Meinhard? Agape and Partnership Fiduciary Duties, 17 Green Bag 2d 257 (2014)

The Bishop’s Alter Ego: Enterprise Liability and the Catholic Priest Sex Abuse Scandal, 46 Journal of Catholic Legal Studies 65 (2007)

Catholic Social Thought and the Corporation, 1 Journal of Catholic Social Thought 595 (2004)

The Bishops and the Corporate Stakeholder Debate, 4 Villanova Journal of Law and Investment Management 3 (2002)

Law and Economics: An Apologia, in Christian Perspectives on Legal Thought 208 (Michael W. McConnell et al. eds., Yale University Press 2001)

Corporate Decisionmaking and the Moral Rights of Employees: Participatory Management and Natural Law, 43 Villanova Law Review 741 (1998) [This one was written before I became a Catholic. I'd write it differently now.]

UCLA law professor takes Bishop McElroy to task over unions, Catholic California Daily (January 16m 2017)

From Priest Abuse to Legal Abuse, TCS Daily, March 26, 2007

Law, Morality and a Just Wage, TCS Daily, February 2, 2007

Cafeteria Catholicism and the Minimum Wage, TCS Daily, January 19, 2007

Jesus Christ as Poached Egg, TCS Daily, May 18, 2006

Judging Faith, TCS Daily, August 9, 2005

Benedict XVI, Tech Central Station, April 20, 2005

Law and Morality in America, Tech Central Station, November 4, 2004

Those Divesting Presbyterians, Tech Central Station, August 2, 2004

“Nothing for Us”: Should Public Libraries Fear Religious Literature?, Liberty, March/April 1998, at 12; reprinted in 41 Christian Librarian 70 (September 1998)

Plus, of course, there's a lot of posts in my Religion category here at the blog.

UND Step Course in Ecclesiology Certificate of Completion

As previously explained, I'm enrolled in the University of Notre Dame's Satellite Theological Education Program (STEP) to pursue their Certificate in Doctrine. I've already taken three of the six required courses, as evidenced by my Certificate of Completion for the Course in Ecclesiology. This has been a tremendously worthwhile program, which has strengthened my faith and enabled me to learn so much more about that faith.

Be patient with me. God is not finished with me.

Outsourcing the Board

Yours truly cited by Judge Kavanaugh's dissent in PHH Corporation v. Consumer Financial Protection Bureau

PHH Corp. v. Consumer Fin. Prot. Bureau, No. 15-1177, 2018 WL 627055, at *88 (D.C. Cir. Jan. 31, 2018) (Kavanaugh, J., dissenting):

As compared to a single-Director independent agency structure, a multi-member independent agency structure—and its inherent requirement for compromise and consensus—will tend to lead to decisions that are not as extreme, idiosyncratic, or otherwise off the rails. Cf. Stephen M. Bainbridge, Why a Board? Group Decisionmaking in Corporate Governance, 55 Vand. L. Rev. 1, 12-19 (2002).

"Can Delaware Be Dethroned?: Evaluating Delaware's Dominance of Corporate Law" Now Available for Purchase

Delaware is the state of incorporation for almost two-thirds of the Fortune 500 companies, as well as more than half of all companies listed on the New York Stock Exchange, NASDAQ, and other major stock exchanges. This gives Delaware a seemingly unchallengeable position as the dominant producer of US corporate law. In recent years, however, some observers have suggested that Delaware's competitive position is eroding. Other states have long tried to chip away at Delaware's position, and recent Delaware legal developments may have strengthened the case for incorporating outside Delaware. More important, however, the federal government increasingly is preempting corporate governance law. The contributors to this volume are leading academics and practitioners with decades of experience in Delaware corporate law. They bring together a variety of perspectives that collectively provide the reader with a broad understanding of how Delaware achieved its dominant position and the threats it faces.